Can You Apply for Sangla OR/CR if the Car Is Not in Your Name?

You need cash and the car you drive every day could be the key to it via a Sangla OR/CR loan. You take out your CR and there it is, someone else's name on there (your father's, your spouse's or the seller's in the case of a second hand car that you never actually transferred at the LTO).

Can you still apply? That's a question we get quite regularly so here's the straight answer.

The short answer

Typically no. Most lenders will only take a Sangla OR/CR application if the name on the CR is the same as the borrower and in the case of a bank financed car it has to be fully paid off first.

The good news is that this is rarely a permanent state. There's always a proper fix for any given situation and that fix will be specific to the reason why the CR is carrying someone else's name.

Why lenders insist on the registered owner

In a Sangla OR/CR loan the lender will keep your original OR/CR as security and you'll continue to use the car. The person who signs has to be the person on the CR or someone who has written authority from them.

• Only the owner can pledge the car. The person who is offering the car as security has to be the registered owner or have written authority from the owner.
• The registered owner is legally responsible. Until the LTO issues a new CR, the seller remains the legally responsible owner under the Registered Owner Rule.
• The lender needs a clean claim. If the borrower and the CR are different names then the lender's security interest is in a pretty weak position.

You can see it in the lenders' published requirements. The original OR/CR is the core collateral (typically along with two IDs, a certificate of employment, three months' income proof and proof of address).

The situations we see most often

Situation	Can you apply?	What do you need to do?
You bought it second-hand and never transferred it	Only if you have a notarized deed of sale	Submit the notarized deed of sale along with the ID of the previous owner. Most financiers offer OR/CR transfer as extra service should you not wish to process yourself
You hold only an open (undated, unnamed) deed of sale	Usually not	Get a complete notarised deed of sale
The car is under your parent’s or spouse’s name	Usually not	The owner applies, with you as co-borrower
The owner is abroad (OFW or seafarer)	Through a representative	The owner signs a Special Power of Attorney naming you
The car is under a company	Only for the company	The company applies, with a board resolution or secretary’s certificate authorizing you
The car is still being paid to a bank or lender	Usually yes	The financier will appraise your vehicle and assess if the unit is eligible to refinance. If eligible, your active loan will be paid off by your new lender and the collateral will be encumbered now to your new lender

Your options, in the order we recommend

1. Transfer ownership at the LTO first. If you're the one who actually bought the car then this is by far the cleanest solution. You'll need a notarised closed deed of sale, PNP-HPG clearance, the original OR/CR, two IDs from each party, the TINs and CTPL insurance in the buyer's name.
2. Let the registered owner apply. If it's a parent or spouse who owns the car then they'll borrow and you'll be on as a co-borrower. The co-borrower takes on the loan liability from the outset.
3. Use a Special Power of Attorney (SPA). If the owner is overseas or otherwise unable to attend they can sign an SPA with you as their attorney. An SPA executed overseas will generally need to be consularised or apostilled.
4. Apply via the company. The company is the borrower, secured by a secretary's certificate and a board resolution.

A word of warning from us: don't fall for any lender who says the name makes no difference. Never sign an undated open deed of sale and always insist on a proper chattel mortgage form. You can also be liable for estafa or falsification if you pledge a car which you don't own.

Five questions to settle before you apply

1. Whose name is on the CR? If it's not yours then select the option above that is appropriate.
2. Do you have a fully completed and notarised deed of sale? An open deed of sale will not be acceptable.
3. Is the vehicle fully paid? A CR that still has a bank encumbrance on it will generally have to be cleared first.
4. Are the OR/CR originals in hand and up to date? Deal with the lost and the expired ones first.
5. Does the borrower fall within the lender's basic rules? The majority of lenders will have an age bracket (typically 21 to 60), will require a steady occupation or business income and may only lend to certain areas.

Before you get going with the documentation, check with Carmudi about the refinance vehicles they support and what vehicles are currently available.

Your document checklist

Requirements will vary from lender to lender so it's worth checking the final list first.

Standard documents for the borrower

• ☐ Original OR and CR in the borrower’s name
• ☐ Two valid government IDs
• ☐ Certificate of employment, or business papers if self-employed
• ☐ Proof of income for the last three months
• ☐ Proof of address, such as a utility bill

Extra documents when the car is not in your name

• ☐ New CR after the LTO transfer, or the notarised deed of sale and transfer papers
• ☐ Special Power of Attorney from the registered owner, consularised or apostilled if signed abroad
• ☐ Secretary’s certificate or board resolution for a company-owned car
• ☐ Proof that any earlier auto loan is fully paid and the encumbrance released

Questions our readers ask

Can I singla a car in my father's or mother's name? Not in your own name. Your parent would be the borrower with you as co-borrower.

Is a deed of sale sufficient without the transfer of the CR? Generally not. The lender will look to the CR so you'd want to complete the LTO transfer first.

I do deliveries on a family member's motorcycle. Can I still apply? The registered owner applies or you have to transfer the motorcycle first. 

Our verdict

You can't generally take out a Sangla OR/CR loan on a car that isn't in your name (that's a paperwork issue rather than a hard barrier). You can either transfer the ownership, have the registered owner borrow or use an SPA. Once you're eligible, do what we tell every single reader to do: compare the refinancing offers on the total cost, not just the monthly rate.

Also read: Car Inspection Checklist Before a Sangla OR/CR Appraisal